can you set up a rent top buy agreement with a private lndlord

thefishdude

soo as title sais i currently rent a property from a private landlord who is a friend. he is willing to do a rent to buy type agreement were i agree to pay so much a month for x amount of years were upon the property will become mine. i can not do the normal mortgate or loan route due to previous financial credit issues. which he is fully aware off.

how do we go about this does it need a lawyer or can you just get an agreement form like what we do now with a normal tennancy agreement we fill out each year.

ValHaller

What you are suggesting is essentially a mortgage with your Landlord friend as lender. You both need your own lawyers.

As you cannot get an ordinary mortgage, you are at risk of buying an unmortgageable property, which means that you might not be able to sell on. Any Landlord with such a property would make friends with his tenants and make an offer which is too good to turn down.

Make sure you get a surveyor in and ask in writing whether the property is mortgageable.

G_M

ValHaller wrote: »

What you are suggesting is essentially a mortgage with your Landlord friend as lender. You both need your own lawyers.

As you cannot get an ordinary mortgage, you are at risk of buying an unmortgageable property, which means that you might not be able to sell on. Any Landlord with such a property would make friends with his tenants and make an offer which is too good to turn down.

Make sure you get a surveyor in and ask in writing whether the property is mortgageable.

* I don't think the OP is suggesting transferring Title of the property till some time in the future - so no, not a mortgage with Landlord friend as lender

I did not interpret this as an unmortgagable property, but a 'borrower' with poor credit!

Sounds more like OP is suggesting
1) agreeing a purchase price now, for a purchase to take place in the future (when?), though it's unclear if the price IS being fixed now
2) using the landlord friend as a savings account - ie making monthly payments (over and on top of rent) which LL will hold till that future date

Or similar....

Seems a) risky - LL might change his mind and run off with the cash! and b) un-thought-out (price? date? if either change their mind?)

Why not just pay rent, and whatever extra cash you have, put in the bank. when you can afford to buy, if your LL is still willing to sell - do a deal.

thefishdude

i dont have to worry about being fleeced by my lanlord he is a friend of the family and a friend first being my landlord came after. the house is was essentially a new build 4 years ago and i have been in it for 3 of them 4 and my girlfriend been in since it was finished she chose teh decor.

so with that in mind is ther away to do this cheaply. he wants to help me but obviously and understandbly dont want to give me a house lol. this is the only house he owns ( apart from his own) and has no interest in being a landlord really and aslong as i pay him enough to cover what the house cost and little bit more ( was very very cheap build) he will be happy. he was basciall a builder that got bored after stopping work so done it as a project to get out of the house lol

also just handing it over he was wondering if it would have tax implications.

thefishdude

G_M wrote: »

*
Sounds more like OP is suggesting
1) agreeing a purchase price now, for a purchase to take place in the future (when?), though it's unclear if the price IS being fixed now
2) using the landlord friend as a savings account - ie making monthly payments (over and on top of rent) which LL will hold till that future date

Or similar....

Seems a) risky - LL might change his mind and run off with the cash! and b) un-thought-out (price? date? if either change their mind?)

Why not just pay rent, and whatever extra cash you have, put in the bank. when you can afford to buy, if your LL is still willing to sell - do a deal.

term will be ten years a fixed price will be set and agreed at start or sale. we wont change mind neither will he good friends of family for many many years.

G_M

He's going to fix the price 10 years in advance...!!!!!!

paddedjohn

What happens if you and your girlfriend become unemployed? What would happen if he died suddenly? What would happen if he got divorced (presuming hes married)?

thefishdude

yes he is fixing a price ten years in advance, he is not doing this for profit he wants to cover the costs of buying it and the money he spent on it plus a little extra. there is no issues over price he knows what he spent.

he wont get divorced hes been married for 40 years very happily imarried i know these peopl trust me.

unemployment isnt going to happen i am currently in ajob which has never made anyone redundant in its history, we permantly short staffed as it is so aslong as i dont !!!! it up wich i wont im safe. im 37 and have been unemployed for only 6 months of that through choice. also if i was unemployed for a while and couldnt pay he honestly would not be bothered he knows i would pay him back.

anyway could we please stop comming up will all the bad points now. this is a unique situation between very good friends there are no risks we just need to know is there a way to do it cheaply and legally its going to happen one way or the other. but obviously cheaper the better. in our heads it should be very simple i currently sign a tennancy agreement every year so is there an agreement we can sign for rent to buy were in so many years it becomes my property? i have found one form online but that was for USA. just wondering if something similar existed over here.

paddedjohn

Im sorry if the questions seem doom and gloom but you have to have all bases covered for your own security.

thefishdude

paddedjohn wrote: »

Im sorry if the questions seem doom and gloom but you have to have all bases covered for your own security.

its ok i understand that, its just a unique situation he would happily just give me the house i and i just keep paying some money to him. but he isnt sure if it would have tax implications or anything like that just handing over something worth so much to someone. wich is why we were looking at rent to buy or what evr its called

jamie11

Unusual situation.

I think the very least you have to do is make sure that you are secure in your current 'tenancy' and that would mean signing an agreement covering the entire period of the mortgage (10 years) That would have to be a deed and should only be done by a solicitor.

Being friends is great, however when it comes to agreements involving large sums of money and years of payments it's going to be better to have it all firmly written down in a contract.

Seriously, young as you are, who is to say you may not fall under a bus sometime during the term? Same thing for your friend. You must protect yourself and g/f and the seller and his heirs as well. Do it properly.